Setting up your business

For income tax purposes, a business is an activity that you intend to carry on for profit and there is evidence to support that intention.  A business includes:

• a profession;
• a calling;
• a trade;
• a manufacture;
• an undertaking of any kind; and
• an adventure or concern in the nature of trade (for more details, see Adventure or Concern in the Nature of Trade).

There are three types of business structure: sole proprietorship, partnership, and corporation. 

The type of structure you choose has a significant effect on the way you report your income, the type of returns you complete each year, and many other matters. One of the most important concerns will be your liability for business debts.